Smart Grid getting reprieve thanks to Senate resolution

Dec 04, 2012 (Jacksonville Journal-Courier - McClatchy-Tribune Information Services via COMTEX) --
A non-binding resolution is giving new life to the next generation of electrical service.

The Illinois Senate last week passed a resolution urging the Illinois Commerce Commission reverse its decision to limit revenue for utility companies.

The resolution expresses a concern on how the ICC's action earlier this year could stall the implementation of the Energy Infrastructure Modernization Act -- or "smart grid" bill.

Commonwealth Edison -- a northern Illinois utility -- has been at the forefront of the smart-grid issue, but Ameren Illinois also stands to lose some funding unless the rate decision is overturned.

During the utility's formula rate case earlier this year, the ICC reduced Ameren's revenue by $48 million annually, which the company said makes it impossible for it to cover the smart-grid investments approved under the Modernization Act.

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It also says without certainty of funding, Ameren Illinois has no choice but to reduce those investments.

"We opted into the Modernization Act to prepare this massive electric infrastructure for the 21st century," said Ameren Illinois President and CEO Richard Mark. "If the Illinois Commerce Commission is compelled to apply the statutory directives as intended by the Illinois General Assembly, Illinois consumers and the Illinois economy will realize substantial benefits."
In May, the ICC rejected Ameren's smart-grid plan, partly because it relied on "incomplete or speculative calculations."
In a press release, the commission said, "Ameren's Smart Grid deployment plan was 'vague and incomplete' and bordered on not being a plan at all, but rather a more of a general statement of intention to install smart meters in some parts of its service territory."
According to Ameren, the Modernization Act provides incentives for investor-owned electric utilities to make significant upgrades and investments to its electric grid while meeting performance, which will result in increased reliability, faster restoration times after outages and significant savings for consumers. It would also allow for the creation of 450 new jobs.

Opponents of the legislation -- such as AARP Illinois-- have said it excessively charges higher rates on utility customers. It also says state law requires the ICC set rates based on actual costs and standard accounting principles, and that is what the ICC did.

The Modernization Act was passed last year with a supermajority vote in both the state House and Senate to override a gubernatorial veto.